EURUSD advanced to its highest level since January 2015 today, hitting 1.1776. The bullish trend was strengthened after prices broke out of a range following a period of consolidation around the key psychological level of 1.1400.
The pair is expected to trend higher as the technical picture is strongly bullish following a crossover of the 50-day moving average above the 200-day moving average on May 23. The 50-day MA continues to point north. Meanwhile, the market is above the daily Ichimoku cloud and the Tenkan-sen and Kijun-sen lines are positively aligned. RSI is trending higher although the indicator has entered overbought territory above 70. This would raise caution for a possible consolidation in EURUSD in the near term.
A decline in prices would find support at the key 1.1600 level. This area has already proven to be strong support in the past few days as drops in prices remained above this level. A break below this would increase downside pressure to target 1.1400.
The overall trend structure and momentum does not favor a very deep retracement and the bull run is expected to remain intact, with scope to rise towards 1.2000. In the meantime, ahead of this, the round level of 1.1800 would be an important barrier to the upside, which if cleared would open the way to the January 2015 high of 1.1870.
